Sustainable Manufacturing: OEE and the Circular Economy

In manufacturing, this means rethinking not just what we produce, but how we produce it and how we can do so with fewer inputs, less waste and longer product life. From tracking materials to reuse models and reverse logistics, circularity requires change on many levels. 

One key metric to focus on in this transformation is Overall Equipment Effectiveness (OEE). OEE offers a powerful way for manufacturers to address core goals such as waste reduction, efficient use of resources and optimized asset performance — all of which lay the groundwork for a more circular future. 

Europe has made progress towards circularity  by successfully decoupling economic growth from resource use and maintaining high resource productivity at over €2/kg since 2015. However, there is still work to be done. With 14 tonnes of material use and five tonnes of waste per person yearly, the challenge is huge.  

Recognizing the need for action, in 2020 the European Commission launched the Circular Economy Action Plan (CEAP), a core element of the European Green Deal, that is pushing for smarter use of raw materials and tighter resource cycles across all industries. The plan seeks long-term sustainability while pressuring businesses to adapt and prove progress with data.​ 

Economic forces are also pushing in the same direction. Energy prices remain volatile, global supply chains are fragile and margins are under pressure, making resource efficiency an economic imperative. 

From insight to action 

So where do manufacturers start? One powerful metric is Overall Equipment Effectiveness (OEE). Creating more value with fewer resources — extending product life and reducing waste — is central to the circular economy. OEE provides a practical framework to put these goals into practice on the factory floor. A circular economy not only supports sustainability, but also drives operational efficiency — helping companies become more economically resilient in the process. 

Widely considered the gold standard for productivity monitoring, OEE offers a measurable way to improve efficiency and enable circularity. It monitors how well a manufacturing process performs by combining three core factors: availability, performance and quality. These factors are distilled into a percentage that helps businesses to identify and address potential areas of waste. 

Poor OEE can lead to unplanned downtime that causes excess waste, energy spikes from equipment restarts and machinery wear. Increasing availability can prevent this. Improving performance ensures optimal speeds and reduces micro-stoppages that may lead to overproduction or excessive energy use. Optimizing quality directly limits scrap rates and rework, thus conserving materials and reducing emissions associated with defective units.  

Data-driven optimization 

Making real sustainability gains through OEE takes more than just periodic reporting. Real-time, high-resolution visibility across the production line is essential. Today’s manufacturers are increasingly embracing technologies like automation software and IoT platforms to gather detailed, granular data from production systems.  

Teams can monitor OEE metrics, detect cycle slowdowns or quality issues, and respond immediately. This kind of visibility can inform predictive maintenance, reduce material waste and even improve energy load balancing across shifts. And with historical trend data, manufacturers can support continuous improvement (CI) and statistical process control (SPC) initiatives.  

Linking OEE with live data makes it possible to measure sustainability in real terms — like specific energy consumption or carbon intensity per unit — and take targeted action.  

Lean and green management 

Lean manufacturing principles are increasingly recognized as effective tools for improving CE outcomes. Lean manufacturing is all about doing more with less — streamlining processes, cutting out waste and focusing only on steps that truly add value to the product — and OEE is a key part of this. As a unified metric, OEE quantifies the impact of both lean and green initiatives in a single performance model.  

Lean methodologies focus on eliminating overproduction, delays and excess motion. Green goals target energy consumption, emissions and material throughput. OEE links these challenges, making it possible to assess key drivers like the effectiveness of changeovers, downtime events and first pass yield in real time — all important elements of lean and green principles. 

Reducing changeover time boosts takt time and limits material waste during transitions. First-pass yield helps to reduce rework cycles to save on both energy and raw inputs. Real-time dashboards make it easier for teams to model the direct correlation between improved OEE and reduced environmental footprint. This helps meet production and sustainability targets. 

Sustainability in practice: OEE strategies that work 

Companies are using OEE strategies aligned with CE principles and seeing impressive results. Handl Tyrol, a speck producer, used COPA-DATA’s zenon software platform to monitor real-time data. This helped to reduce downtime and support precise resource usage while also improving its energy efficiency and OEE percentage, aligning perfectly with the company’s sustainability goals.  

Meanwhile, White Panther, a prawn farm in Austria, used zenon to optimize process parameters in its indoor aquaculture operation. The facility operates with a self-sufficient energy and heat supply, powered by hydroelectric and biomass systems from its own resources. As well as generating 30 GWh of electricity a year — enough to power the entire town of Rottenmann — the system makes use of wasted production heat. This residual heat is now used to keep all 56 tanks at a constant 28°C — essential for optimum prawn growth. By closely tracking equipment performance and responding rapidly to process deviations, it improved overall efficiency while minimizing water and energy consumption.  

To meet climate goals, moving towards a circular economy is critical. Manufacturers must adopt strategies to not only enhance their performance, but centre sustainability too. OEE is a valuable tool to bridge the gap between the two and support lean processes and green goals. By monitoring and optimizing OEE, businesses can work smarter, waste less and build a circular, more sustainable future.  

Looking ahead: OEE as a foundation for change 

OEE is a valuable tool in the shift toward circular manufacturing — but it is only one part of a much larger puzzle. Truly circular systems require attention to design, supply chain coordination, and reuse strategies. 

By focusing on efficiency and performance at the equipment level, manufacturers can lay a strong foundation for further circularity efforts. The journey toward a circular economy is ongoing — and starts with smarter operations today.